, suggested that Canada is in the early stages of a bear market, attributing a large part of that to the Bank of Canada’s continuing interest rate hikes. Although the higher interest rates were meant to correct housing market conditions, Rosenberg said, they’re hurting Canadians too.
“Affordability has only been as stressed today as it’s been just two or three times in history: 1990 and 1981-82, when interest rates were three to four times higher than they are today, which tells you something about the principal payments that you have to pay,” Rosenberg said. Benjamin Tal, Deputy Chief Economist of CIBC World Markets Inc., supported the idea that the market is going to continue to decline, but said that the current price decline figure of 20% that’s widely used isn’t a true reflection of the market’s loss.
“It’s starting to come down, but it doesn’t come crashing down. It’s like a race between watching the paint dry and grass grow,” Rosenberg said. “But it is actually moderating and I think the next year is going to be quite a bit lower.”